Q-Review 1/20171

March 2017

Bellwethers of a fall

• We issue our first-ever warning of a global crash.

• International debt issuance stalled in 2008 and has never recovered. To cope, central banks and

governments created a massive flux of artificial liquidity that led to a feeble economic recovery.

• Asset valuations are not in line with the underlying real economy, which creates a risk for a market

crash in the near future.

• Economic forecasts may be seriously biased at the moment.

It is well known that the recovery from the financial

crisis of 2007 – 2008 has been nascent all over the

world. Global economic growth has lagged

previous recoveries both in speed and scope. Figure

1 (see Appendix) presents the gross domestic

product (GDP) per capita for 160 countries

indicating declining growth. While the average

annual GDP pc growth was 2.3 % from 1994 to

2008 (1991-1993 there was a global recession), this

growth was only 1.5 % from 2010 to 2015.

Several attempted explanations for this slowdown

have been provided, including declining aggregate

demand, debt-overhang and productivity

slowdown. Our analysis yields a more detailed

outcome: The crisis of 2007 - 2008 reversed the

trend of financial globalization, which has

undermined global growth. The pull-back in

financial globalization has been masked by central

bank-induced liquidity and continuous stimulus

from governments which have created an artificial

recovery and pushed different asset valuations to

unsustainable levels. This implies that we live in a

“central bankers’ bubble”. This is something we

have been warning earlier (see, e.g., Q-review

1/2016). In this report, we will show why the central

bankers’ bubble is such a big problem for the global

economy.

1 Gns Economics wishes to thank Laura Jernström for insightful comments and suggestions for the final version of the report.

During the past few decades, globalization has

been one of the driving forces of economic growth.

Moving production to low-cost countries tamed

inflation, elevated millions of people out of poverty

and fostered global growth. In this process,

financial globalization has played an essential role.

Financial capital has been seeking the most

productive investments worldwide, which has

created opportunities for borrowing and

development also in the more rural areas. This has

been seen as an increased issuance of international

debt securities and cross-border bank lending.

However, the growth in the issuance of

international debt securities stopped in 2009

(Figure 2) and the cross-border bank lending started

to contract in 2008 (Figure 3). These are signals for

a reversal trend in financial globalization.

This reversal is visible in the global net inflows of

foreign direct investments presented in Figure 4.

They reached their peak in 2007 being still some $2

trillion dollars below this level. Currently, they are

also below their long-run trend (1990-2015).

Plausible explanations for the declining

international debt issuance include:

1. Debt securities and cross-border lending are

returning to their long-run/natural trend

Business cycle forecasts, 3/21/2017

2

from the debt-fueled boom in the late 1990’s

and early 2000’s.

2. The world economy has been in a slowly

moving crash since 2008, which can pickup

pace at any moment.

3. Increased uncertainty.

4. Combinations of the above.

In the first case, it is assumed that there exists a

long-run trend, or an equilibrium, between global

GDP, the international debt securities and cross-

border lending. Increasing production and/or

improving production technologies are usually

associated with borrowing against future income

from those investments. Thus, when production

grows, the debt stock has a tendency to grow. This

leads to a trend or equilibrium growth in GDP and

debt. The IT-boom at the end of the 1990’s and the

excess savings of Chinese and oil-rich nations in the

early 2000’s accelerated speculative investing

worldwide. This may have led to an abnormal

growth of debt and cross-border lendings. That is,

international financial flows to speculative

investments could have increased international debt

issuance and broken its equilibrium with the world

GDP. The crisis of 2007 - 2008, mostly induced by

speculative investments (CDO’s, etc.), led to a pull-

back in speculative investment flows, which caused

a contraction in the international debt issuance. And

this will keep going until global debt issuance

reaches a new equilibrium with the global GDP

growth.

The second explanation states that the economies

never recovered from their 2007 – 2008 crisis. Low

aggregate demand and slow productivity growth

left the economies in a situation, where they have

been unable to grow due to lack of productive

investments. This has led to decreasing debts and

cross-border financial flows between nations, as

2 See, e.g., Werner (2014) for a detailed explanation and

empirical evidence on the bank lending.

profitable investment opportunities have not been

available.

Thidly, financial anxiety created by exceptional and

un-tested monetary policies (e.g., near zero and

negative interest rates) and geopolitical tensions in

Middle-East, South China Sea and Ukraine may

have caused investors to become more wary

concerning their investment strategies. This

increased uncertainty among investors could have

obstructed international debt creation since the

crash of 2008.

Every explanation forebodes troubles for the global

asset markets and GDP growth. Because debt and

especially bank lending create liquidity,2 stalling or

diminishing loan creation indicates that there is less

liquidity in the world economy. This leads to

deflation and a recession. Major central banks have

been battling this trend since the crisis of 2007 -

2008 (Figure 5). They have tripled the size of their

balance sheets (from around $6 trillion to around

$18 trillion) through the programs of quantitative

easing (QE) to stem off global deflation.

Governments have joined the battle and the share of

central government debt to GDP in 36 major

industrial economies rose from 62.5 % in 2008 to

83.4 % in 2015. The global sovereign debt now

stands at $44 trillion (around 60% of global GDP).

These measures have supported the global economy

but they have not solved the underlying problem,

namely the reversal trend of financial globalization.

Limits of central bank-induced stimulus

The expansion in governments’ debt and balance

sheets of central banks can naturally go on only for

a limited time. There is an upper limit in the debt

per GDP ratio and QE programs will be limited by

the assets available to the central banks. In practice,

Business cycle forecasts, 3/21/2017

3

the market economy restricts the central bank-

induced creation of money.

When private firms issue loans and bonds to

households, corporations and investors, they trade

with each other in competitive markets that allocate

assets and resources on the basis of their expected

profits and risks. The larger the share of publicly

owned assets in these markets, the less efficient is

this allocation process. This is because efficient

allocation requires that the risks and expected

returns of assets are signaled through market prices.

When central banks take active roles in these

markets, they mess up the price signals, because,

unlike normal investors, central banks do not have

a budget limit; they need not to obey the

fundamental economic principle of scarcity. Thus,

when central banks buy assets with money that has

no counterpart in the real economy, it will only

inflate the asset prices thus distorting the price

signals from expected profits and risk. At some

point, the central bank would hold majority of the

assets, which would “kill” their market. This is why

central banks have capped their purchases of assets.

So, in practice, the QE programs are limited by the

fact that government bonds are held as collateral by

banks and other financial institutions, which at

some point, will just refuse to sell. Currently,

holdings of government bonds by the European

Central Bank (ECB) is closing the (self imposed) 33

% issuer limit put on place to stop ECB of coming

dominant government of creditors. ECB also holds

over 10 % of European corporate bond market.

Therefore, ECB programs are already reaching their

(practical) limits.

The central banks have already bought massive

amounts of government and corporate bonds. Thus,

the prices of assets have already been fed by central

3 For a detailed explanation on accounting standard for

central banks and historical examples, see Dalton and

Dziobek (2005).

bank stimulus indicating that the current valuations

are not sustainable, or that they are sustained only

through central bank-induced artificial liquidity. In

a way, the central banks have painted themselves

into the corner. Returning to normally functioning

market economy would require removing all the

support functions (normalizing interest rates and

selling cbs’ holdings of corporate and government

bonds), which would crash the asset markets. The

central banks cannot go on buying debt securities

indefinitely either, as explained above. This poses a

perplexing problem. As the central banks hold large

amounts of government and corporate debt, a

dramatic fall in their values could force them to bear

heavy losses thus impairing their independence and

credibility.3 Although the central banks can

temporarily operate with negative capital, losses

would eventually need to be covered. This can be

done either through capital injections from

governments and/or by increasing seigniorage

revenues through money printing. As governments

are already highly indebted, money printing is the

only option to cover massive losses.4 But this tends

to lead to rapid deterioration in the value of money,

i.e., to markedly fast inflation.

Threat of a systemic crisis

As we speculated in our report in December (Q-

review 4/2016), the risk for a systemic crisis or a

‘meltdown’ has increased as well. A systemic crisis

occurs when credit markets seize to function, i.e. as

they ‘freeze’ due to mistrust between financial

institutions induced by unknown but potentially

massive losses. Such losses may arise, for example,

through a crash in the asset markets. In practice, a

systemic crisis arises when banks stop lending and

making mutual deals. Other financial agents, like

investment banks, will follow and the flow of credit

dries up. We came extremely close to this after the

4 There is also one interesting theory on how central banks

could be reliquified through the International Monetary Fund

(IMF) using the Special Drawing Rights. We will return to

this in our blog later in the spring.

Business cycle forecasts, 3/21/2017

4

failure of the investment bank Lehman Brothers in

the fall of 2008. According to several insiders, we

were only hours away from a shut-down of the

global financial system.5 Therefore, utopistic as it

may sound, the threat of a systemic meltdown is still

tangible.

Seizing up of the global credit markets would have

some serious repercussion for the global economy.

In a systemic crisis, the global trading of bonds,

commodities, assets, and derivatives will lose

power. One of the most noticeable effects of a

systemic crash would be the freezing of the Forward

Freight Agreement (FFA) markets used by ship

owners, traders and charterers to protect their

shipments against price swings and accidents.

Without FFA’s, the global shipments of goods and

trade would seize. The roll-over of debts would

become basically impossible and the flow of credit

would become squeezed. Credit cards would stop

working and, eventually, money would stop coming

out of ATM’s. Commerce would diminish to a very

minimum (food and basic necessities) and

economies would grind to a halt. It is very likely

that civil unrest would follow.

There is, however, a system in place to contain the

effects of a meltdown of the financial markets.

After 2008, governments across the globe have put

in place regulations and means, which allow a

controlled closing of financial markets and seizing

up the assets of financial institutions by government

authorities. They would, basically, lock-up the

money of consumers, corporations and investors in

financial institutions until the crisis has passed, to

avert the failures of the big financial institutions.

The money locked-up could also be used to shore

up the balance sheets of financial institutions. This

is the ‘bail-in’ procedure, which is the current

guiding principle of bank rescues in the EU. It

would be an effective remedy for the crisis, but it

5 See, e.g., the interview of former Chancellor of the

Excequer of Britain Alistair Darling and comments by former

Chairman of the Federal Reserve Ben Bernanke.

would also wreak havoc among corporations and

consumers as these measures would deny access to

the funds. Officials may also issue similar cash

withdrawals as in Greece during the summer of

2015, when the daily limit of a withdrawal from an

ATM was €50. This would naturally seriously

undermine the functioning of the economy.

For such an apocalyptic event, a trigger that

induces a global financial metldown is needed. We

identified four such triggers in December (Q-

review 4/2016):

1. The crash of the European banking sector.

2. A combination of a rising value of the

dollar, banking regulation and risk aversion

among the big banks, decreasing the roll-

over of global dollar-denominated debts.

3. China’s economic crisis.

4. Bursting of the central bankers’ bubble.

From these, the de-regulative policies of the Donald

Trump decreases the likelihood of no. 2 by scaling

back the banking regulation. Furthermore, the

likelihood of the other triggers has remained the

same or increased.

The European banking sector is still teetering on the

edge of collapse. Italian government has pledged to

use some €20 billion to save ailing Monte dei

Paschi di Siena, the world oldest bank, but they

have serious issues with their largest bank,

Unicredit, too. Earlier this year, this bank

announced that its capital ratio may fall short of the

requirements of the ECB. To cover the shortfall,

Unicredit needs to raise over $13 billion of new

capital by June, the biggest capital expansion in the

history of the Italian stock market. In total, Italian

banks are reported having $360 billion worth of

non-performing loans in their balance sheets versus

$225 billion of equities. This indicates that the

Business cycle forecasts, 3/21/2017

5

entire Italian banking system may become

insolvent, if its economy fails to recover. IMF has

also raised alarm about the banking system in

Portugal. At the end of the last year, the ratio of

non-performing loans to total gross loans in

Portuguese banks was 12.2 %, having increased by

11 percentage points since 2006. The euroarea

average is 5.4 %. If bank failures starts from Italy

and/or Portugal, they could easily expand to

European-wide, because of the close financial

connections between the Europan banks. Moreover,

The Deutsche Bank is still alarming, regardless of

the $8.5 billion public offering and the $2 billion it

is expected to receive from asset sales. Banking

crisis in Italy could be something that pushes it over

the edge and the European banking sector with it.

One of the main factors behind the latest spurt in

global economic growth has been the stimulus of

China. It is not well known, but China had a

miniscale recession in 2015 caused by a squeece in

lending and a fiscal shock. To counter this, Beijing

issued a massive debt-driven economic stimulation

program at the beginning of 2016. Both the

recession and the stimulation can be seen from the

development in the composite leading indicators

(CLI) shown in Figure 6 in the Appendix. CLIs

track the near future prospects of an economy

through changes in the orders and inventories of

businesses, different financial market indicators

and business confidence surveys. Figure 6 shows

first a downturn in summer of 2015 and then a sharp

upturn in the summer of 2016 in the CLI of China.

China has relied heavily on debt creation to

stimulate economic growth since 2008 and that road

is ending. Figure 7 shows the current level of credit-

to-GDP ratio and the GDP per capita in China,

Finland, Japan, Taiwan and the United States and

their financial crises. The Figure shows that in

6 Crafts and Fearon (2010).

7 Gold standard was a partial reason for this, as under it

increasing interest rate attracts gold inflows and capital into

the country.

China, the share of credit-to-GDP is at a very high

level, especially when compared with the level

when other countries have faced financial crises.

Also, the numbers do not include the ‘shadow

banking’ sector, which is reported being large in

China. With the speed of credit creation more than

twice that that of growth of GDP, it is evident that

China cannot continue with this trajectory for very

long.

The bursting of the central bankers’ bubble could

start from a crash in the stock and/or bond markets.

In the US, the traditional valuation criteria e.g the

price-to-earning, and price-to-sales ratios of stocks

are very high. According to some estimates, they

have been higher only two times: before the crash

that ignited the Great Depression in 1929 and before

the bursting of the IT-bubble in 2000. From these,

the crash in 1929 is the most relevant to the current

situation. Its was preceded by years of easy credit

and speculation.6 After the Federal Reserve

tightened its monetary policy in January 1928,

corporate results started to worsen, but speculation

increased.7 Boom reached its peak in August 1929

and after months of poor corporate earnings the

Dow Industrial lost 25 % of its value in just three

trading days between October 24 (“Black

Thursday”) and October 29 (“Black Tuesday”).

After a brief recovery, stock markets continued

their decline and bottomed out only two and a half

years later in June 1932 having lost almost 90 % of

their value. Consumption, investments and

corporate profits collapsed leading to a depression

that spread across the globe. In the US, the

depression lasted until spring of 1933.8

There is one additional trigger that needs to be

considered, namely European politics. Elections in

France and Germany could leave the euro and the

8 Crafts and Fearon (2010).

Business cycle forecasts, 3/21/2017

6

EU in a perilless situation. The victory of Marie Le

Pen in France could start a process, where France

would exit from the common currency. Although

the likelihood of an euroexit of France is still

relatively small, 15 % according to our estimate,

elections and referendums last year imply that

surprises (against the polls) are possible. However,

there is another course that could lead to political

instability in Europe. Let us say Emmanual Macron

wins in France, there will be coalition excluding the

party of Geert Wilders in Holland and Martin

Schultz wins in Germany. Then Germany and

France could start to hasten European integration.

European parliament and commission are currently

drawing out plans for, e.g., rainy-day fund which all

the countries of Eurozone would be obliged to

participate. It would provide gratuitous funds for

the euro countries experiencing recession. This

would enact direct income transfers between

countries of Eurozone, mainly from North to South.

There could even be a requirement that not joining

the rainy-day fund would mean stepping out of the

euro. How would, say, people in Finland and the

Netherlands respond to this? With all likelihood,

not well. And the situation of Greece is getting very

hairy, once again. If there is a default, Greece will

most likely leave the Eurozone. If a single country

leaves the euro, it will change the currency union in

a way that is very difficult to predict, possible even

leading to its complete demise. Eurozone breakup

would shake the global financial order to the core.

Therefore, European political developments need to

be watched closely as they may yield some major

shocks. We estimate that the likelihood of a

political crisis in the EU is 45 % for the next 12

months.

Forecasts

We estimate that the likelihood of a serious

correction or a crash in the asset markets is 70 % for

the next twelve months. Thus, we issue a global

crash warning. If there is a crash, central banks are

likely to hasten or re-start their QE-programs.

Whether this will be sufficient to stop the fall is

uncertain, but if not, a crisis will commence.

We estimate that the likelihood of a new financial

crash is 60 % for the next 12 months. We evaluate

the likelihood that a global financial crisis would

morph into a systemic crisis is currently 10 % for

the same period of time.

However, we consider that in a case of a renewed

global financial crisis or a major panic in the asset

markets, the partial or full application of lock-down

and bail-in procedures would almost be guaranteed.

This is because a crash the bond markets would

seriously undermine the solvency of the central

banks thus making it very hard for them to increase

the size of their balance sheets in a response to the

crisis. That is why the only reasonably option left

for policymakers would be a lock-down of the

financial assets and markets.

Although we have drawn a disturbing picture of the

world economy, its short-term growth prospects

look rather good. In Table 1 we present the

nowcasts and the growth forecasts for the real GDP

of Eurozone, Finland, and the United States under a

consensus scenario.

Table 1. Nowcasts (nc) and forecasts for the growth rate of

real GDP in the US, Eurozone and Finland. Source: OECD,

Bureau of Statistics and GnS Economics.

Quarter Finland Eurozone USA

2016 1.31 1.68 1.88

2017:1(nc) 0.8 0.88 0.71

2017:2 0.52 0.39 0.49

2017:3 0.47 0.29 0.56

2017:4 0.29 0.35 0.50

2017 2.1 1.9 2.3

2018 2.0 1.3 2.3

According to our forecasts, the US economy would

growth 2.3 percent this year and the following year.

Eurozone would grow 1.9 percent this year and 1.3

percent next year. Finnish economy would grow 2.1

percent this year and 2 percent next year. So,

Business cycle forecasts, 3/21/2017

7

everything looks rather nice, but the problem is that

these figures are highly dependent on the policy

decision made by government and central banks.

More so than probably ever in the history of modern

fiscal and monetary policies (that is, since the

1930’s).

How long can this all continue? The simple answer

is: As long as governments and central banks can

keep it going. World economy has been supported

by China recently, so a lot depends on what kind of

a policy China takes. The asset purchases of the

central banks will be limited by the assets available.

The ability of central banks to act in a crisis is also

questionable as they would suffer crippling losses if

bond markets crash.

For the crisis to start, all that is required is a trigger

that starts a panic selling in the financial markets.

Years of easy credit, central bank meddling and

speculation have led prices to very high levels in

several asset markets, including stocks. If there

would be a crash in the stock markets, the economy

of China would tumble, the Italian banks would fall

or Eurozone would fall into disarray, the crisis

would be very likely to start. Not on that instant, but

within the next few months when losses would

begin to emerge. Faced by a market panic, the

central banks would probably re-start or hasten their

QE-programs. They could also resort to, e.g.,

helicopter drops of money, cash bans and negative

interest rates or to the direct monetization of

government deficits. It is uncertain whether these

would be enough to stem the panic, but even if

successful, they could only delay the onset of the

crisis.

To summarize, it is our view that the bubble in the

world economy has just come too big to avoid a

massive correction. Without some kind of “divine

intervention”, the bubble will burst and the world

economy will crash. We just do not know the exact

date of its demise. The first signals of the bursting

of the bubble could include increasing fluctuations

(mini crashes) in the asset markets and stress on the

money markets, especially in the inter-bank

markets.

However, when predicting the onset of a crisis, the

wisdom of former economist and professor at MIT,

Rudiger Dornbusch, should always be remembered:

“Crises always take longer to arrive than you think

and then happen much quicker than they ought to.”

The policy makers still have tools in their disposal

to delay the inevitable. The big question is what

they will do next and this makes forecasting the

onset of a crisis exceptionally challenging.

Nonetheless, in the current economic environment,

the safest bet is preparing for the worse.

Business cycle forecasts, 3/21/2017

8

Appendix

Figure 1. The GDP per capita of 160 countries in constant international dollars (base year 2011). Source: World Bank.

Figure 2. International short term debt securities in current local currencies for 47 countries. Source: World Bank

10000

11000

12000

13000

14000

15000

16000

17000

18000

19000

World GDP per capita

0

500,000,000,000

1,000,000,000,000

1,500,000,000,000

2,000,000,000,000

2,500,000,000,000

3,000,000,000,000

3,500,000,000,000

4,000,000,000,000

19

96

19

96

19

97

19

98

19

99

19

99

20

00

20

01

20

02

20

02

20

03

20

04

20

05

20

05

20

06

20

07

20

08

20

08

20

09

20

10

20

11

20

11

20

12

20

13

20

14

20

14

20

15

20

16

Global short-term international debt securities, 1996Q1 -2016Q3

Business cycle forecasts, 3/21/2017

9

Figure 3. Cross-border loans for 185 countries in current dollars for banks reporting to the Bank of International Settlements (BIS).

Source: BIS

Figure 4. Net inflows of foreign direct investments (current dollars) and their linear trend estimated from a regression: 𝐹𝐷𝐼 =

𝑎 + 𝑏𝑡 + 𝜀𝑡 for 190 countries. Sources: World Bank and GnS Economics.

5000000000000

10000000000000

15000000000000

20000000000000

25000000000000

30000000000000

19

95

19

96

19

97

19

98

19

98

19

99

20

00

20

01

20

01

20

02

20

03

20

04

20

04

20

05

20

06

20

07

20

07

20

08

20

09

20

10

20

10

20

11

20

12

20

13

20

13

20

14

20

15

20

16

Global cross-border loans from BIS reporting banks, 1995Q4 - 2016Q2

0

1,000,000,000,000

2,000,000,000,000

3,000,000,000,000

4,000,000,000,000

5,000,000,000,000

6,000,000,000,000

7,000,000,000,000

Net inflows of foreign direct investments and their trend, 1990 - 2015

Trend World

Business cycle forecasts, 3/21/2017

10

Figure 5. Real gross domestic product (left axis), international debt securities in all maturities and increase in assets of central

banks since 2007 (right axis) in real international dollars in China, France, Germany, Japan, Switzerland, the United Kingdom and

the United States. Source: World Bank

Figure 6. Composite leading indicators for the euroarea, the United States, China and G7 and OECD -countries. Source: OECD

0

5,000,000,000,000

10,000,000,000,000

15,000,000,000,000

20,000,000,000,000

25,000,000,000,000

24,000,000,000,000

26,000,000,000,000

28,000,000,000,000

30,000,000,000,000

32,000,000,000,000

34,000,000,000,000

36,000,000,000,000

38,000,000,000,000

40,000,000,000,000

42,000,000,000,000

44,000,000,000,000

GDP, international debt and CBs' assets of 6 major industrial nations

GDP (constant $) Debt securities Debt + increase in CBs' assets

98

98.5

99

99.5

100

100.5

101

Composite leading indicators

United States Euro area (19 countries) G7 OECD China

Business cycle forecasts, 3/21/2017

11

Figure 7. The GDP per capita (horizontal), credit-to-GDP ratios for non-financial private sector (vertical) and financial crises. Sources: BIS, the World Bank and GnS Economics

REFERENCES:

Crafts, N. and P. Fearon (2010). Lessons from the 1930s Great Depression. Oxford Review of Economic Policy, 26(3): 285 – 317.

Dalton, J. and C. Dzioberk (2005). Central bank losses and experiences in selected countries. IMF working paper no. 05/72.

Werner, R.A. (2014). Can banks individually create money out of nothing? – The theories and the empirical evidence.

International Review of Financial Analysis, 36: 1 – 19.

Process descriptions

The forecasts reported in this Q-review are based on the statistical modeling methods from the most recent academic

research on predicting business cycle fluctuations. Nowcasts refer to the forecasts of the growth rates of the real Gross

Domestic Product (GDP) for the current quarter. Nowcasts are needed because the standard measures for the GDP are

published after a considerable lag and are typically subject to subsequent revisions, indicating that the coincident state

of the economy is always uncertain. Our nowcasts for the current quarter are based on statistical models where all

relevant information available at the time of nowcasting is utilized.

The GDP forecasts for longer horizons (over the current quarter) are based on the dynamic forecasting models where

forecasts are constructed iteratively. This means, for example, that the three-quarter forecast is essentially based on

the two-quarter forecasts and so on. Forecasts are constructed for all three economic areas (the Eurozone, Finland and

the US) indicating that they depend on each other. Finally, note that the forecast scenarios considered in this Q-review

are based on the expert view of GnS Economics.

-----------------------

0

50

100

150

200

250

0 10000 20000 30000 40000 50000

Cre

dit

-to

-GD

P r

atio

GDP per capita

The GDP per capita, credit-to-GDP ratios and financial crises

Finland

Japan

USA

China

Thailand

Finland's banking crisis 1991-94

Japan's financial crisis 1991 - 2000

US financial crash of 2007 -2008

The Asian financial crisis 1997 - 1998

China Q3 2016

2008

Business cycle forecasts, 3/21/2017

12

The next Q-review will be published in June 2017.

-----------------------

Contact information: Tuomas Malinen, PhD

CEO

tel: +358 40 196 3909

email: tuomas.malinen@gnseconomics.com

www.gnseconomics.com

This GnS Economic report does not constitute a solicitation for the purpose of sale of any commodities, securities or investments.

The information presented here is considered reliable, but its accuracy is not guaranteed. Persons using this report do so solely at

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